PLUS The experts provide answers to some of the top questions Money gets from our readers.
Financial Break-up
What’s the best way to invest the proceeds from a divorce settlement?
The very best advice I can give when it comes to investing the proceeds from a divorce settlement is to take your time. The best investment you will make after a divorce is not property, shares or super. It is an investment in time to build a future plan for your life and your money. This will be one of the best investment decisions you have ever made.
Divorce is inevitably a time of high emotion, stress and uncertainty. I know that once a financial settlement is reached and there is money to invest, there is a new sense of being in control of your own money and the desire to “move ahead” and make decisions. But there are so many variables. Will you reduce your mortgage, buy a home or an investment property, top up your super or buy shares? Then there are far more important things. Will you keep working, or go back to work? There are complex issues relating to children, other family members, your age, where you want to live now and in the future and, more broadly, how you want to live your life.
If you listen to all the advice from family, friends, the media and people like me, you may well feel under pressure to make decisions. But these can go badly wrong. I have seen people take a divorce settlement and rush into buying a property, without the time and thought put into the right location and also enough research to ensure a purchase is made at a sensible price.
Others have paid off their mortgage. Now that sounds great but then they have found that a job was harder to get than they thought, meaning they needed access to the money. As you can imagine, this trip to the bank goes badly. The bank can’t set up a new mortgage if you have no source of income.
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Esta historia es de la edición September 2017 de Money Magazine Australia.
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